Maria Kiwanuka promised that the government would not squander the windfall that will come with the exploration of an estimated 3.5 billion barrels of crude, and would not become a petro-state.  She added that oil would only be one part of a bigger recipe to develop the economy.

Maria Kiwanuka: Uganda to invest oil money

“The petroleum sub-sector, however sexy it may be, is only part of the overall economy. Uganda is not Saudi Arabia, it is not Venezuela, we are not even Nigeria.

Kiwanuka said the government had already started working to make sure the oil cash will not be siphoned away from the state coffers.

With hundreds of dollars potentially flooding in, she said authorities may not initially have the capacity to spend all the proceeds.

She said that revenues not used for development at home would be invested overseas to ensure that the economy does not overheat amid the surge of cash.

The country will create a fund akin to a sovereign wealth fund that invests in “triple A” rated securities she said.

“Because of the delicacy and sensitivity of petroleum revenues you can’t afford to lose a single cent. Even though you are aiming for an extra dollar, if you lose one cent that would be the headline.”

The fund would be run by external experts to avoid the need to build up an entity from scratch.

She said a law will come before parliament next month that would form a framework for the sector and would create a single bank account through which oil revenues, taxes and royalties would flow.

“We will not have special accounts here and there,” she said.

“I have a colleague from another African country who told me that when they became finance minister they found the national oil entity had 96 accounts.”

In Uganda, she said, oil “will not be a parallel economy.”

Uganda’s path to production has been a bumpy one since deposits were discovered in 2006 near its border with the Democratic Republic of Congo